Many municipalities nationwide rely on fines and fees to balance their budgets or recover costs, which can have unintended negative consequences. Fees attach a price to a public service, while fines are meant to deter individuals from committing certain violations and punish those who do. Most of us have, at some point, paid a fee for municipal services or received a fine for a violation, like speeding. Perhaps you paid the fine or fee without a second thought and continued on with your day; but for many Americans, the impact of compounding fines and fees can threaten already shaky financial stability.
Many fines and fees are structured with little to no consideration of residents’ ability to pay, creating a revenue source for municipalities that can adversely impact economically insecure residents as well as those with limited financial resources the hardest. Unpaid fines and fees can quickly escalate, leading to large implications for people’s daily lives such as barriers to housing and employment, driver’s license suspensions and even jail time. Moreover, steep fines and fees have been shown to have a disproportionate impact on low-income and Black, Indigenous and People of Color (BIPOC) communities. Though many municipal fines and fees continue to see increases, research reveals that fine- and fee-related debt owed by residents is unlikely to be paid off impacting both residents and the municipalities.
CAFFE Program
To respond to the negative impact of municipal fines and fees, National League of Cities launched the Cities Addressing Fines and Fees Equitably initiative (CAFFE), which assisted 14 cities in two cohorts with launching programs to address the harmful effects of fine- and fee-related debt on their residents and exploring possible reforms.
The CAFFE initiative adapted NLC’s LIFT-UP Model, which incentivizes eligible residents to access financial empowerment services to remit or reduce their debt. Participating cities began by assessing which local fines and fees were most detrimental to residents’ financial stability to guide their program design. After determining which fines or fees to target, city staff identified potential program participants and referred them to their programs. Across the cohort cities, residents reduced the amount of fine- and fee-related debt owed to their municipalities, and several continued to access financial empowerment services even after the program’s conclusion. Several key learnings about how to effectively implement these types of diversion programs arose from the CAFFE initiative and are outlined in the NLC brief, “How Cities are Rethinking Fines and Fees to Strengthen Residents’ Economic Stability.”
Expanding Program Impact
Four of the cities from the CAFFE initiative’s second cohort received mini-grants of up to $10,000, enabling them to sustain and expand upon the programs they launched during the CAFFE initiative.
Dallas, Texas
The City of Dallas originally focused on residents who had at-large animal fines through a collaboration between the Office of Equity and Inclusion, the Office of Community Care and Dallas Animal Services (DAS). Dallas prioritized animal fees as a focused and testable use case that had been historically set to recover service costs. Staff then used the CAFFE initiative to pilot and refine alternatives to cost recovery that sustained operations without compounding debt for residents. Dallas conducted outreach to households identified by the burden model and DAS records, focusing on residents with pet-related civil citations and unpaid balances in high burden areas. With the mini-grant, the CAFFE team on the ground expanded their program to offer it to residents who had been issued fines from other city agencies, including code compliance.
Maywood, Illinois
In Illinois, homeowners in the Village of Maywood are subject to exorbitant late property tax fees and many are at risk of losing their homes. Some residents have already lost their homes and are still buried under late property tax fee-related debt. Maywood utilized their mini-grant to prolong their program, which incentivized residents to have portions of their late property tax fees paid off by attending financial counseling.
St. Louis, Missouri
The City of St. Louis expanded upon their original program, which focused on residents who had been assessed fines for driving without insurance. While the St. Louis CAFFE pilot program was successful in reducing the debt owed to the city by participants, the St. Louis team observed that one of the largest barriers to long-term financial resilience was the lack of access to credit-building tools that would assist residents with obtaining insurance to prevent repeat fine issuance in the future. City leaders used their mini-grant to become a member of the Credit Builders Alliance, enabling city staff to obtain certification as credit coaches to provide one-on-one financial coaching to residents who owed fines for driving without insurance.
As cities look to recover costs by increasing fines and fees, ensuring that these efforts aren’t impacting residents should be a key consideration. Municipalities should review their policies and procedures regarding fines and fees and consider how they can minimize the disparate impact on their residents and provide necessary financial services.
Download the Brief
Learn how communities can rethink fines and fees to strengthen residents’ economic stability and download the brief today.
About the Author
